Companies grapple with anti-spam implementation costs

In the run-up to the 2015 federal election, Canadian business owners may start getting unsolicited emails from political parties inviting them to fundraising dinners.

The ones that come from the Conservative Party of Canada may be especially aggravating. After all, it was a Conservative government that brought in Canada’s Anti-Spam Legislation (CASL) — a law that is costing Canadian businesses millions to implement but that few believe will put any kind of dent in phishing scams and spam.

They may bristle at the idea that the Conservative government exempted political parties from the kinds of penalties that legitimate Canadian businesses now face under CASL for sending a single email.

Fines for breaching CASL can reach maximums of $1 million for individuals or $10 million for corporations, although it’s expected those kinds of fines will be levied only against the worst repeat offenders — the true spammers of the world.

“Our objective is not to punish but rather to achieve compliance in the most efficient way possible while preventing recidivism,” said Patricia Valladao, a spokeswoman for the Canadian Radio-television and Telecommunications Commission (CRTC).

But Canadian companies need not be fined to have CASL hit them in the pocketbooks. The Canadian Federation of Independent Business (CFIB) estimates it is costing small and medium-sized businesses in Canada between $30,000 and $50,000 to become compliant with CASL. They are also losing significant volumes of business contacts, thanks to CASL’s requirement that businesses get implied or express consent of recipients to send any kind of electronic message that has a commercial intent. Businesses had until July 1 to get the express consent of their subscribers and business contacts.

“The success rate of how many people actually confirmed became pretty low,” said Robert Burko, president of the Canadian email marketing firm Elite Email. “There’s a lot of anger, especially in the small-business community right now.”

What many Canadian business owners find most annoying is how complex and heavy-handed CASL is compared with anti-spam laws in other countries such as the U.S., which adopted a simple opt-out approach, as opposed to the opt-in approach that Canada took.

“Was it completely necessary, or is this a bit of an overreaction?” asked CFIB director Richard Truscott. “I think that’s a legitimate question that should be debated and discussed during the next election campaign.”

“It does represent an enormous amount of record-keeping and paperwork. They’ve brought in a law and don’t seem to have thought too much about how businesses will actually adjust,” Truscott said.

CASL has been in effect for two weeks now. In the first week of the new legislation going into effect, the CRTC received 12,000 complaints about spam. But it’s estimated that only two per cent of the world’s spam originates from Canada, so the CRTC may have little legal authority over the vast majority of the offenders.

Some of Burko’s clients saw their client email lists dwindle by 40 per cent.

Business-to-business (B2B) trade will be the main casualty of CASL, he said, because consumer-focused companies have a variety of ways of getting customers to sign up for things like newsletters and e-flyers.

“A lot of these B2B companies rely on the cold email,” Burko said. “Now that email’s not allowed, they’re really hit hard by this because the capabilities of them to now build a new permission-based, opt-in, CASL-compliant list for lead prospecting is difficult.”

The new law has had some surprising consequences. Whereas email marketers like Burko feared it could put a serious dent in the email marketing business, it has actually had the opposite effect, he said.

“We’ve actually been growing by leaps and bounds.”

Companies that once did their email campaigns and newsletters in-house are now wanting the security of a company that specializes in email marketing, Burko said.

And many of his new clients are Canadian businesses that are switching from U.S. email marketing firms to Canadian ones, he said, because they feel they will have a better understanding of CASL.

Telecom and Internet analyst Mark Goldberg believes CASL will only worsen the Canadian business community’s reputation for being behind the times when it comes to e-commerce.

“What we’re doing is we’re putting Canadian legitimate businesses at a significant disadvantage,” he said. “And in two years we’re going to scratch our heads once again and say, ‘How come Canadian companies aren’t adopting e-commerce like the rest of the world?’”

For more information on CASL, visit fightspam.ca or order the CASL guidebook Internet Law Essentials: Canada’s Anti-Spam Law through www.stpub.com.

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